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There were several upgrades to the '02 and later 996 that make it more desirable in my opinion. The engine improvements and HP, stiffer chassis, revised bumpers and headlights, revised interior with a glove box and better cup holder, etc.
The C4 is not really more prone to problems, but you give a little in weight (and 1 mpg). I thought the C2 was actually more fun and did not car for the C4. I drive it year round. With a good set of snow tires, never had a problem.
As with any car, maintenance and service records are important.
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